AIDS and Lawyers

May 5, 1986

There were encouraging reports last month that scientists are making great progress in developing a vaccine against AIDS. Unfortunately, under present legal conditions, even if such a vaccine were available tomorrow, no one would produce it.

Suppose the research and development department at the Mammoth Drug Company does come up with an AIDS vaccine. The scientists test it on monkeys and rats, and it works. The microbiologists say it's a sure bet to work on humans too. What next? To start with, a lengthy review of the record by the Food and Drug Administration. Then tightly supervised human testing in limited populations. Federal law is clear: drugs are not allowed on the market until they are proven not merely "safe," but "effective" as well. The same testing is required whether the drug treats AIDS or acne. The earliest conceivable FDA approval is two years down the line.

And probably a lot longer. There's a good chance the new vaccine--like many of the old ones used against other diseases--will be a living (but weakened) virus. This crippled AIDS virus almost certainly will have been developed by genetic engineering. And today's regulators are deeply nervous about gene-altered organisms. Any kind of testing outside a triply secure lab will require interminable advance review. The Agriculture Department recently prompted a front-page controversy after it cut some corners in approving a gene-modified vaccine for a pseudorabies that is deadly to swine. Approving a genetically altered bug that looks a lot like the AIDS virus will lead to a much bigger fuss.

But maybe Washington would throw out the rule book for something as politically urgent as AIDS. Assume an AIDS vaccine could get prompt blessing. Next step: manufacture. But most vaccines have side effects of some type or another. Remember swine flu? The vaccine against the disease turned out to cause Guillain-Barre syndrome in some who received it. Whooping cough? The pertussis vaccine occasionally causes death or serious brain damage. Sabin polio vaccine? Responsible for an occasional case or polio. The benefit of taking all these vaccines far outweighs the tiny risk of side effects. But for those very few who lose the gamble, the temptation to sue is overwhelming.

Of course, the FDA testing might uncover the AIDS vaccine side effects before Mammoth goes to market. But then again, it might not. FDA tests will be carried to the point where everyone is sure that the vaccine cures more disease than it causes. But that's about all that a limited test of 2,000 persons can ever tell you. There's no way the FDA can nail down the one-in-a-million human side effect without actually vaccinating a million people. Even if the FDA discovers a side effect, this doesn't mean that the vaccine won't--or shouldn't--be produced. It just means that manufacturers will be able to warn people of the possible side effect before they take the vaccine, which may provide some legal protection. But there can be no warning against side effects that are unknown.

And what are the occasional side effects of the AIDS vaccine likely to be if they do materialize after mass inoculations? Impossible to say. But there's a fair chance that for the tiniest fraction of those vaccinated the side effect will be AIDS itself, or something equally horrible. Hearing this, the general counsel at Mammoth Drug may have a stroke. He's been spending a lot of time in court recently, defending vaccine lawsuits, and without much success. He knows, for example, that a polio victim in Kansas successfully sued American Cyanamid for ten million dollars in 1984. The vaccine was fine, made just as the FDA requires. But one unlucky recipient suffered the side effects that neither the FDA nor Mammoth knows how to eliminate, and a jury was feeling generous. It happens, the case of vaccines, it happens often.

Even if the risks from the vaccine are very small--much smaller than the risks from AIDS itself--the financial stakes are huge. Weird and unexpected things happen in drug litigation. Look what happened with the swine flu vaccine. AH those who contracted Guillain-Barre syndrome within two months of receiving the vaccine we compensated for their illnesses, even though as many as half of the cases were not caused by the vaccine.

Suppose the AIDS vaccine is perfectly safe for most people, but causes allergic reactions in those who had already been exposed to AIDS. Mammoth could end up paying dearly, even if it warns everyone of the risk. Somewhere, somehow, the wrong person will still get vaccinated. Or even more likely, the right person will be vaccinated: someone for whom the one-in-a-million side effect is clearly a risk worth taking (just as taking the polio vaccine is well worth the infinitesimal risk today). But then the side effect will strike, and the victim will claim he wasn't sufficiently warned. Faced with a sympathetic victim, a jury can be adept at rereading the fine print of a warning and finding it inadequate. If the new AIDS vaccine gets out there on the market, scratched into the arms of millions of people, and it turns out to have any side effects to speak of. Mammoth could go under.

Mammoth's general counsel does not plan to preside over the bankruptcy-court dismantling of his corporate empire. Remember Johns-Manville and asbestos? A.H. Robbins and the Dalkon Shield? Those firms may indeed have been negligent, but that's small comfort to the Mammoth general counsel. He will remind the Mammoth board of directors that negligence is always easier to find in hindsight. No doubt he will also remind them that Wyeth Laboratories halted manufacture of the whooping cough vaccine in 1984, citing dramatic increases in insurance and litigation costs. Dozens of other companies have left the Vaccine market in the last 15 years for similar reasons.

The lawsuits that are driving companies out of the vaccine business generally don't even allege negligence in manufacture. They usually turn on arguments about how the warning on the package was phrased, or on fancy theories of liability without fault. Any theory will do, if it might get a case to the jury. Knowing this, nervous companies settle--and then get out of the vaccine business.

Our Mammoth Drug Company can't buy comprehensive insurance for any vaccine marketing, and neither can anyone else. Why not? The general counsel at Colossal Insurance doesn't care for bankruptcy any more than her brother at Mammoth. Selfish, but a very real fact of today's marketplace. This fact was made clear ten years ago, during the swine flu scare. Congress rushed through some emergency legislation, assuming responsibility for the vaccine's side effects (which were pinned down well after the program got under way). The pharmaceutical companies were required to sell the vaccine at cost, realizing not a penny of profit. The Justice Department spent the next ten years dealing with millions in liability claims. They're still digging out.

Of course, Congress might well get around to raising the legislative umbrella over the new AIDS vaccine too. There's already a bill before the California legislature designed to guarantee the purchase of an AIDS vaccine, and protect its manufacturer from liability. But it's only a bill, and only in one state. And if Mammoth has to rely on this, or on the federal swine flu model, the profit in its AIDS vaccine will be unimpressive.

So what exactly does Mammoth have to gain from pushing its AIDS research? The corporate research scientists are terribly excited, of course--there's probably a Nobel Prize waiting out there. The PR people would love to draft the new ads for the evening news: "Mammoth Drug: People to the Aid of People." And there might be some money to be made on the vaccine in Europe and Canada. The Rock Hudsons of the world could undoubtedly pay a premium to get the vaccine overseas. All of this might be enough to keep a modest amount of research going. But research microbiologists come very expensive these days--not to mention the equipment and laboratories they need. Testing to satisfy the FDA is expensive too. Even if there are still potential profits, a few lawsuits could swallow them all. But all in all, these are slim pickings. Better for Mammoth to send most of the R&D boys back to the massmarket nasal sprays.